A conspiracy is defined as an agreement between two or more persons to commit an illegal act, with at least one conspirator attempting to commit an overt act that would further the object of conspiracy. The use of the conspiracy charge is much more common in federal court, as a lesser participant in a fraud scheme can be held criminally liable if there is less direct evidence of his/her involvement.
Federal Conspiracy For Fraud
The federal statute conspiracy statute specifically alleging fraud, that is, material misrepresentations of fact, is found in Title 18, specifically 18 U.S. Code §1349, Conspiracy to Commit Fraud. This statute provides three different underlying federal offenses as the object of the conspiracy. These underlying offenses/allegations in §1349 are
Bank Fraud, 18 U.S. Code §1344;
Mail Fraud, 18 U.S. Code §1341; and
Wire Fraud, 18 U.S. Code §1343.
Statue of limitations varying depending on the type of fraud charged.
For example, Bank Fraud has a statute of ten (10) years, while Mail Fraud and Wire Fraud conspiracies alleged under §1349 are five (5) years for statute of limitations
Conspiracy to commit fraud is frequent charge used to prosecute federal white collar crime cases.
CONSPIRACY – WHAT IS IT?
A conspiracy has been referred to as a collective criminal agreement, or a partnership in crime. It is a favorite statute for prosecutors, especially federal prosecutors, who use the charge of conspiracy for various offenses.
This is especially true for the traditional types of federal offenses, which are white collar fraud related cases and large drug trafficking cases.
The “traditional” federal conspiracy statute is 18 U.S. Code, §371. A conspiracy is defined as an agreement between two or more persons to commit an illegal act, with at least one conspirator attempting to commit an overt act that would further the object of conspiracy. Some of the conspiracy charges do not require that an overt act be attempted, unlike the traditional requirement.
See U.S. v. Shabani, 513 U.S. 10, 13–‐4 (1994)(conspiracy to violate the Controlled Substances Act [21 U.S. Code §846] does not have an overt act requirement); Whitfield v. U.S., 543 U.S. 209, 219 (2005)(conspiracy to commit money laundering [18 U.S. Code §1956] has no overt act requirement.]
In prosecutions where there is no overt act requirement, the prosecution may introduce overt acts evidence to try to ensure there is sufficient proof of participation in the alleged conspiracy. State statutes for conspiracy exist for prosecutions in state courts, although traditionally the use of the conspiracy statute is much more common in federal court, mostly due to the fact that federal investigations and prosecutions, on the whole, are more complex and involve more defendants.
Also, there are state statutes that provide state prosecutors with a conspiracy-type weapon.
CONSPIRING ACTORS AGREE TO CONSPIRE THEN DEMONSTRATE WORDS AND ACTIONS.
By definition, a conspiracy is an agreement (Iannelli v. United States, 420 U.S. 770, 781–‐82 (1975). Merely being present is not sufficient to find a conspiracy, even if the associates are known criminal participants. A conspirator has to have agreed with co-conspirator(s) to be guilty of a conspiracy, rather than just an agreement with an undercover police officer/agent to commit an offense. The government may prove a conspiracy by words or active evidence, such as negotiations, appearances at transactions, responsibility for collecting monies, if and how co-defendants know each other, etc.
Mere association is not sufficient to prove one’s agreement for and participation in a conspiracy. Also, for a drug trafficking conspiracy, courts have held that buyer-seller relationship only is insufficient to prove that the buyer is a member of a conspiracy.
See U.S. v. Parker, 554 F.3d 230, 234-35 (2nd Cir. 2009); U.S. v. Johnson, 592 F.3d 749, 754 (7th Cir. 2010); U.S. v. Donnell, 596 F.3d 913, 924-925 (8th Cir. 2010); and U.S. v. Bacon, 598 F.3d 772, 777 (11th Cir. 2010).
CONSPIRACIES REQUIRE TWO OR MORE PEOPLE
The U.S. Supreme Court has held that at least two persons are required to constitute a conspiracy. Rogers v. United States, 340 U.S. 367, 375 (1951). The government does not need to successfully prosecute all alleged co-conspirators to prove a conspiracy against those indicted.
SUCCESS OF THE CONSPIRACY IS IMMATERIAL
It is immaterial whether the conspirators are successful in the completion of the object of the conspiracy, as the crime of conspiracy is completed once there is an agreement for the conspiracy, and for the federal conspiracy pursuant to Title 18, U.S. Code §371, once at least one of the conspirators attempts an overt act that is in furtherance of a conspiracy. If the conspirators so agree to participate in the conspiracy, and one of them attempts to commit/complete an act that would further the conspiracy, even if it fails, then there technically is/was an illegal conspiracy that existed.
LATE JOINER AND LESSER ROLE
Also, there is no requirement for a prosecution that a defendant, who is alleged to be a co-conspirator, know all the participants. Further, a co-conspirator who joins the conspiracy after it was on-going can be criminally liable just as the other conspirators who orchestrated it. A conspirator with a lesser or a minor role in the conspiracy may well receive a less harsh sentence if he and others are convicted, but that is a sentencing issue, rather than an issue of whether he is guilty of participating in the conspiracy.
What are the two types of Criminal Conspiracy?
A procedural issue of great importance to parties accused of conspiracy is whether government prosecutors try to frame the conspiracy as a “hub-and-spoke conspiracy” or a “chain conspiracy”:
- In a hub-and-spoke conspiracy, many parties conspire with one person, but not with other defendants. It is advantageous for a defendant to have its actions characterized as part of a hub-and-spoke conspiracy; because that means that the conspiracies are separate and disconnected.
- A chain conspiracy involves several parties as links in one long criminal chain. Defendants in chain conspiracies are responsible for the actions of all participants in the chain, even if they never met some of the other participants in the chain.
FEDERAL COURT v. STATE COURT PROSECUTIONS
Conspiracy is utilized much more in federal prosecutions than in state court prosecutions, as generally speaking, cases prosecuted in federal court are more complex and involve more transactions than those prosecuted in state court. This fact allows federal prosecutors to include other persons in an Indictment that charges conspiracy, when the evidence does not show their direct involvement in an apparent illegal act, and/or when such a person’s actions by himself or herself do not constitute an identifiable crime. State cases intended to prosecute a number of persons acting in concert to achieve an act with criminal intent use their conspiracy statute, or its equivalent. Such a state statute in Texas charges “Engaging in Organized Criminal Activity” that is found in the Texas Penal Code at Section 71.02. This statute is used to prosecute a group of persons who allegedly act in concert for a common criminal outcome. The potential underlying criminal activity that the group is alleged trying to achieve, can be a number of types of crimes, ranging from white–‐collar fraud to gang activities.
CO-CONSPIRATOR LIABILITY AND STATEMENTS
Co-conspirators are liable for acts of other co-conspirators that are deemed to be foreseeable, while committed in furtherance of the conspiracy. Pinkerton v. United States, 328 U.S. 640, 647 (1946). Additionally, statements by one co-conspirator can be admissible at trial if it is determined that it is a statement made during and in furtherance of the conspiracy.
This is true even if the statement is by itself hearsay. Rule 801(d)(2)(E), Federal Rules of Evidence (“Co- Conspirator Statements”). The co-conspirator statement(s) can be used against other co-conspirators as it applies.
FEDERAL CONSPIRACY – TWO TYPES OF CONSPIRACIES
Pursuant to 18 U.S. Code §371, there are two (2) types of conspiracies that can be prosecuted using this more traditional conspiracy statute. The first type lists a Conspiracy to Commit a Federal Crime, which requires that the underlying criminal activity be a crime that is outlawed by federal statutes.
The second type of conspiracy listed in §371 is a Conspiracy to Defraud the United States. This type of allegation does not require that the underlying criminal activity be a federal crime, although as a practical matter, such a conspiracy charged in a federal court Indictment would often, if not likely, allege criminal conduct that is an offense against the federal criminal statutes. Most federal criminal statutes are found in Title 18 of the United States Code, while some are found in Title 15 (securities fraud), Title 21 (drug cases and drug trafficking), and a variety of others.
END OF THE CONSPIRACY
A conspiracy continues until the conspirators achieve their objective of the conspiracy, or until a co-conspirator withdraws from the conspiracy (deeming the conspiracy over for this particular co- conspirator), or until the conspiracy is abandoned.
There are several other federal conspiracy statutes in addition to 18 U.S. Code §371. Common conspiracy statutes in federal court include:
- 1) 21 U.S. Code §846, alleging a drug trafficking conspiracy;
- 2) 18 U.S. Code §286, conspiracy to defraud the United States using a false claim; and
- 3) 18 U.S. Code §1956, conspiracy to commit money laundering.
STATUTE OF LIMITATIONS
Traditionally, most federal offenses carried a statute of limitations of five (5) years. This is still true regarding the traditional federal conspiracy at 18 U.S. Code §371. However, some federal statutes have increased the length of the statute of limitations, notably one statute has increased the limitations to ten (10) years.
NEWER FEDERAL CONSPIRACY FOR FRAUD
A more recent federal statute alleging conspiracy is found in Title 18, specifically 18 U.S. Code §1349, Conspiracy to Commit Fraud. This statute has three (3) prongs, as it provides three different underlying federal offenses as the object of the conspiracy. These underlying offenses/allegations in §1349 are: 1) Bank Fraud, 18 U.S. Code §1344; 2) Mail Fraud, 18 U.S. Code §1341; and 3) Wire Fraud, 18 U.S. Code §1343.
Their respective statute of limitations is dependent upon the underlying fraud allegation statute, that is, these fraud states listed here.
Bank Fraud has a statute of limitations of ten (10) years, which would then increase the statute of limitations under §1349 to ten (10) years, while Mail Fraud and Wire Fraud conspiracies alleged under §1349 are five (5) years for statute of limitations, because Mail Fraud and Wire Fraud have five (5) years as a statute of limitations.
IF YOU ARE FACING CHARGES FOR CONSPIRACY YOU NEED A LAWYER WHO HAS EXPERIENCE WITH THESE CHARGES.
Keep in mind; criminal defense in Dallas demands effective, technical and skilled representation and this is exactly where the technical knowledge and skill of John Teakell comes in.
Act NOW, if you are facing charges for conspiracy or other related crimes. Talk to Teakell for best legal representation for these types of criminal charges.
If you suspect you are under investigation, or have already been charged with a crime contact the law office of John R. Teakell immediately for a free consultation.